A blog for entrepreneurs, proprietors of small to medium size businesses,community interest groups, partnerships and individuals providing advice and comment from John Pointon, Accountant, Business and Tax Consultant.
Please send any suggestions for topics you would like to see covered to me at jpointon@gmail.com or 34,Lightley Court,Sandbach, Cheshire, CW11 4QA or phone 01270 763 466.

Saturday, 7 November 2009

UK Immigration Law : Changes to Sponsorship Law

They include a number of significant changes that are incorporated into the system with immediate effect. It is important that sponsors consider the new guidance and make appropriate changes as soon as possible. I refer below to the changes which I consider require immediate attention.

Promotions: Classified As Employment Changes

The new guidance states that where a migrant worker is continuing to work for the same employer, but their 'core duties and/or responsibilities change, or where their position in the hierarchy of the sponsoring organisation changes, for example, due to promotion, this is to be treated as a change of employment'.

The effect of this is that in such circumstances the sponsor must issue a new certificate of sponsorship and the migrant must make a fresh application for leave, both actions requiring the relevant fee to be paid. Additionally UKBA states that 'the migrant's application for leave must be approved......before they can start work in their new job'.

Sponsors and migrants should ensure that they carefully consider whether or not any changes require change of employment action, including whether or not a resident labour market test needs to be carried out for the new role. If such action is required and is not taken at the appropriate time, this could cause the employee to be in breach of conditions. This could lead to the employee's leave being curtailed in the future, a ban on re-entry, downgrading of the sponsor rating from A to B (or withdrawal where serious abuse has occurred) and also to employee claims against an employer who has negligently failed to comply with the guidance.

A reminder that in relation to work permit holders, where the permit holder's duties have changed due to 'promotion, demotion or restructuring,' this is classed as a change of employment and requires that a certificate of sponsorship is issued with a fresh leave application.

UKBA has introduced a new exemption to the general requirement for tier 2 (general) positions to be advertised via JobCentre Plus where the job is in the role of director, chief executive or legal partner, and the salary is £130,000 or above or where there will be stock exchange disclosure requirements.

ICT Employees - Restriction On Direct Replacement Of A Settled Worker And New Rules Relating To Maternity, Paternity And Adoption Leave

New rules have come into effect which restrict the direct replacement of a settled worker by an employee who is entering the UK under the ICT provisions. Interestingly, the guidance makes no reference to the same scenario but where an employee working with permission granted under the ICT provisions of tier 2 or the work permit scheme is already in the UK. This could simply be an oversight by UKBA.

Employers will of course already be ensuring that the replacement of any employee does not fall foul of employment legislation and such care should be adopted in relation to this requirement.

In addition, the general rule that a migrant must have been working for the sponsoring organisation for at least six months directly prior to their transfer - either outside the UK or inside the UK where they had permission to work for the sponsor under the ICT provisions of tier 2 or the work permit scheme - has been amended to take into account migrants who have been absent due to a period of maternity, paternity or adoption leave. In such cases and where the migrant has been employed by the sponsoring organisation for at least six months out of the last 18 months, they can still be employed under the ICT provisions provided all the other criteria are met.

The documentary requirements have not been amended to include evidence that the migrant has been on maternity, paternity or adoption leave.

However, it is advisable that such evidence is submitted with the leave application to demonstrate the reason why the migrant is applying under this exemption.

Allowances - Changes To Level Of Accommodation Costs

UKBA will now take account of accommodation allowances of up to 40% of the gross salary for short-term transfers where:

the migrant is applying from outside the UK with a certificate of sponsorship that has been assigned for 12 months or less; or

the migrant is applying for an extension that will take the total stay in the UK to 12 months or less.

UKBA has removed the requirement in relation to intent to claim tax relief contained in paragraph 171 of the pre-7 August 2009 sponsor guidance notes.

Salary - Removal Of Requirement To Be Paid In The UK And Guidance On Reduction Of Salary

Salary may now be paid by the sponsor from inside or outside the UK.

Where, due to the economic climate, the salary has been reduced, a change of employment application (and new certificate of sponsorship and leave application) will be required unless:

the migrant has current tier 2 leave; and

s/he will continue to do the same job, with reduced working hours; and

the reduced hours are part of a company wide policy to avoid redundancies; and

the sponsor is not treating the migrant more or less favourably than resident workers; and

the migrant's pay or working hours do not reduce by more than 30%; and

any reduction in salary is proportionate to the reduction in hours; and

the arrangements will be in place for no more than one year.

A change of employment application will be required in all other scenarios where salary is reduced.

All salary changes, including the above, must be reported to UKBA via the SMS, other than changes due to annual increments, bonuses, or natural progression within the same job (provided the progression is at the same level and is not a promotion since promotions require a change of employment).

Letter Certifying Maintenance

Where an A-rated sponsor provides a letter certifying maintenance, UKBA now requires that the migrant's certificate of sponsorship reference number is included.

Milkround - Exemptions On Time-Frame For Certificates Of Sponsorship

Where a migrant has been recruited through a milkround, certificates of sponsorship may be assigned within 12 months of the milkround taking place.

Contract Work - New Guidance

Where a migrant worker has been supplied to the sponsor organisation by another organisation on a contract basis, the sponsor will be the organisation which has full responsibility for determining the duties, functions and outcomes, or outputs or the job, the migrant is doing.

UKBA will only approve the issuing of a certificate of sponsorship if it is clear that the sponsor has full responsibility for deciding the above. Where the migrant is carrying out work for a third party on behalf of the sponsor, the migrant must be contracted by the sponsor to provide a time-bound service or deliver a time-bound project on behalf of the sponsor. They may not be contracted as agency workers or to undertake a routine role for the third party which is not related to the delivery of a time-bound service by the sponsor.

Miscellaneous

I have identified the above changes as those which are likely to be most important to sponsors in possession of a tier 2 licence. The new guidance notes also include changes in relation to tiers 4 & 5 and some less critical changes in relation to tier 2 which sponsors should also urgently familiarise themselves with.

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